On Friday, 31 August, EACHA, the European Automated Clearing House Association, authorised version 3.0 of the EACHA Taskforce Report, 'Technical Interoperability Framework for SEPA-compliant Giro Payments Processing'. Version 3.0 elaborates on the open issues from version 2.0.
Equens intends to use this Framework as a basis for bilateral interoperability agreements between banks and ACHs .
EACHA believes that interoperability is a key component of SEPA infrastructure in a competitive market that does not impede infrastructural consolidation.
If payment processors and financial institutions implement these interoperability conventions and principles, this will give banks the freedom to change community, or join several communities, all based on the same interoperability basics.
For banks, interoperability will create a seamless payment processing environment on an operational level so that Straight Through Processing (STP) is optimised, enabling realisation of the SEPA objectives. It promotes competitive choices for banks, as well as creating operational flexibility and resilience by avoiding a single point of failure in the SEPA market.
For payment processors, interoperability will help to reduce the fragmentation of market infrastructures during and after the transition to SEPA. By partially harmonising Clearing & Settlement Mechanism (CSM) practices, interoperability will improve competition. Instead of avoiding market consolidation, interoperability will actually be one of the enablers of market consolidation. Interoperability will lead to healthier competition in the market, as unnecessarily protective boundaries will be removed. Interoperability will not be compulsory and some CSMs may provide reach to others.
The document covers a wide range of issues in detail:
• Reachability and routing tables
• Message formats to be used
• Cross-settlement between Automated Clearing Houses
• Reconciliation between transaction flows and settlement.